Supply in England rose by 19% in the first half of 2011 compared with the same period of 2010, and accounted for 73% of the farmland marketed in Great Britain. The East Midlands recorded the largest increase (59%) in supply compared with the same period of last year. There was also a significant rise in the South East of England of 36%.
Illustrated in Graph 3, market activity in both Scotland and Wales fell by 3% and 4% respectively during the first half of this year compared with last. It took until the second quarter of the year for the market to pick up in Scotland when over 90% of the 22,133 acres marketed was launched.
Across Great Britain, therefore, the volume of publicly marketed farmland increased by 12% to 94,400 acres compared with 84,500 acres during the same period in 2010.
Interestingly, more than 80% of this farmland was marketed in the second quarter of 2011. During May alone, 32,930 acres of farmland were publicly marketed and according to our research, this is the most land advertised publicly in one month since September 2008.
Although significant, these volumes are below the levels recorded in 2007, when nearly 110,000 acres were publicly marketed across Great Britain during the same period. Similarly, it is also only just over half of what was marketed during the same period in 2000.
Buyers and Sellers
Demand remains strong. About 15% of all farmland buyers registered with Savills looking to buy at least 100 acres were new registrations this year. This is on a par with the same period of last year. However, there is evidence to suggest buyers are becoming more cautious and price sensitive with the impression that much of the good news is in the current price of land.
46% of Savills applicants have between £2 million and £5 million to spend on farms and estates, which is a small increase on the same period of last year. Our research suggests there has been an increase in applicants looking to buy in Scotland.
Our analysis of farm transactions in the first half of 2011, where Savills acted for the seller or the buyer, points to a renewed interest from new non-farming lifestyle buyers. They represented about one-third of all buyers compared to less than a quarter in 2010.
Farmers are still the dominant buyer, with farm expansion the principal reason for purchase. This year to date there has been little interest in UK farmland from overseas buyers. In contrast, overseas owners of British farmland became net sellers. Analysis of the reasons for sale shows debt is becoming a greater driver for sales. It is too early to tell if this will bring more land to the market and anecdotal evidence from our agents suggests the volume of land brought to market during the rest of the year will be tight.
